3.1.1 Create Derivative Product

In Derivatives Product Definition screen, specify basic information about the derivative product such as Product code, the description, etc.

1. On the Home page, type DVDPRMNT in the text box, and click next arrow.

   The Derivative Product Definition screen is displayed.

   Figure 3-1 Derivative Product Definition

   
   Description of "Figure 3-1 Derivative Product Definition"
2. On the Derivative Product Definition screen, specify the fields and click Ok.

   For more information about the fields, please refer to the below table.

   For any product created in Oracle Banking Treasury, click the appropriate icon in the horizontal array of icons in the screen to define generic attributes such as:

   • Interest Details
   • Tax Details

   For a derivative product, in addition to these generic attributes, define specific other attributes. These attributes are discussed in detail in this chapter.

   Define the attributes specific to a derivative product in the Derivatives Product Maintenance screen and the Product Preferences screen. In these screens, specify the product type and set the product preferences respectively. For further information on the generic attributes refer to the following Oracle Banking Treasury User Manuals under Modularity:

   • Product Definition
   • Interest
   • Charges and Fees
   • Tax
   • User Defined Fields
   • Settlements

   Table 3-1 Derivative Product Definition- Field Description

   Field	Description
   Product Code	Identify the derivative product created with a unique Product Code. This code must be unique across all the modules of Oracle Banking Treasury. The field is mandatory.
   Product Description	Describes the product created in this field. The description entered here helps to identify the product all through the module.
   Product Type	Specify the Product Type. The product type identifies the basic nature of a product. The derivative types maintained through the Derivative Type Maintenance screen reflects in the options list available for this field. A derivatives product created belongs to any one of the following types: Forward Rate Agreements Interest Rate Swaps Cross Currency Swaps
   Product Slogan	Specify a slogan for the product created that suitably announces the product to your customers.
   Product Group	The product type identifies the basic nature of a product. The derivative types maintained through the ‘Derivative Type Maintenance’ screen reflects in the options list. Invoke the list of the product groups maintained in the bank and choose the product group to which the product that you are creating belongs.
   Start Date	Specify an offered date. Specify the date in the Start Date Field.
   End Date	Specify the date until the product is open in the field. Note: Do not enter a date that is earlier than the current system date. It is not possible to offer a product beyond the specified end date. If an end date is not specified for a product, it can be offered from an indefinite period.
   Remarks	Specify the remarks related to the product. Its for reference.
   Exchange Rate Variance (in%)	Defines the exchange rate variance that allows for a derivatives product. This variance is expressed in percentage. For a special customer, or in special cases, use an exchange rate (a special rate) that is greater than the exchange rate f3rmaintained for a currency pair. The variance is referred to as the Exchange Rate Variance. When creating a product, express an Exchange Rate Variance Limit in terms of a percentage. This variance limit would apply to all contracts associated with the derivatives product.
   Override Limit	If the variance between the default rate and the rate input varies by a percentage that is between the Override Limit and the Rate Stop Limit, save the transaction (involving the product) by providing an override.
   Stop Limit	If the variance between the default rate and the rate input varies by a percentage greater than or equal to the Stop Limit, its not possible to save the transaction involving the product.
   Rate Code	Select the appropriate rate from the option list to specify whether to use Mid Rate for all Cross Currency transactions or the Buy/Sell Rate is used, depending on the nature of the transaction. It is required to maintain Buy, Sell, and Mid Rates for every Currency Pair and Rate Type combination.
   Rate Type Preferred	Specify the Rate Type that should be used for Cross Currency transactions. The adjoining option list displays all the Rate Types maintained through the ‘Rate Type Definition’ screen. You can choose the appropriate one.